Apple Inc.’s (NASDAQ:AAPL) CEO Tim Cook is not taking lightly claims made by the European Commission that his company now owes $14.5 billion in back taxes. In an open letter published on Apple’s website, Cook defends Apple’s committment to paying any taxes that the company owes. He adds that Apple has never been in the business of seeking special tax treatments, as alleged by the Commission in its tax ruling.
The European Union’s antitrust regulator has accused Apple of colluding with the government of Ireland to avoid paying Europe taxes that rightly belong to the region. Both Apple and Ireland have emphatically rejected the EU’s claims of an illicit tax arrangement existing between them.
Apple is a large employer and taxpayer
writes his letter as a reminder to the Apple community in Europe that the tech giant upholds only good intentions and deems this case of the $14.5 billion tax ruling to be a demonstration of EU regulators having gone overboard.
On the issue of employment, Cook riffles through Apple’s history, looking back to its early operations in Europe. Cook recalls that Apple’s co-founder Steve Jobs initially set up a factory in Ireland’s Cork region and went on to provide employment to 60 people in 1980.
Apple’s operations in Ireland have developed substantially now that the company there employs almost 6,000 people
. Cook also indicates that Apple’s vast operations in Ireland have actually made it the largest taxpayer in the country. Furthermore, Cook argues, Apple is also among the largest taxpayers in many jurisdictions around the world, including the U.S.
Ireland is not complaining
Cook’s letter reveals a perplexed CEO who simply cannot understand why his company is being asked to pay back taxes to a government that does not believe they are owed.
The claim that the EU has brought against Apple contends that the company entered into a tax agreement with Ireland that allowed the company to pay almost zero tax on the profits it generated in Europe. According to the EU, the tax fraud ran for more than a decade and ended up giving Apple undue advantage over other companies carrying out business in Europe.
The EU claims that its investigations discovered that Ireland allowed Apple to only allocate a tiny fraction of its European profits for taxation in Ireland.
Is EU punishing American companies?
However, EU’s tax ruling against Apple has reignited protests that the bloc was unfairly targeting American companies. Apple and the U.S. government have attested that the EU’s tax claim shows blatant disregard of international tax norms.
Appealing the tax decision
Apple and the Irish government have appealed the EU’s tax ruling. Cook expresses confidence that the ruling will be overturned, thus allowing Apple to escape the $14.5 billion back tax hit.
Of the companies that the EU has accused of attempting to skirt taxes in the bloc, Apple’s $14.5 billion back tax bill dwarfs them all. Additionally, the Commission is investigating McDonald’s and Amazon over illicit tax deals.